Tuesday, February 12, 2008

Feature: Crossroads


A fine example of Our government working for you--$720,000 dollars a day for the Iraq war machine (halliburton, betchel, GE, ect)...but not one dollar for the education of a country, and worse, continued student "enslavement" loans! Thanks to studentloanjustice for the post. Why didnt I hear about this on Fox News????

Blue Dog Democrats Sell out to Banks on Student Loans by studentloanjusticeTue Feb 12, 2008 at 03:37:29 AM PST

I am still dumbfounded at what happened with student loans last week. Please read this.Also, check out our website: www.studentloanjustice.org
Last Week, there was an amendment put up for the Higher Education Act. Danny Davis (IL) was the sponsor. This amendement was simple: Restore limited bankruptcy protections for private student loans. These are the high interest, credit card-like loans that we see commercials for on TV all the time. These loans are not backed by the federal government, yet the student loan industry got the republican Congress to do away with bankruptcy protections for these loans as a part of the 2005 Bankruptcy Bill.

This amendment was thought by most to be a no-brainer. The fact that this language was successfully snuck into the 2005 Bankruptcy Bill at all was the real story. Initially, the industry argued that if Congress removed bankruptcy protetions, it would allow them to make more loans to needy students. This turned out to be a lie. 2 years after, it was shown that loans made to people with low credit scores did not increase.

So there is absolutely no sane argument for removing this important protection for these loans. None. There is absolutely no reason that these loans should be treated any differently from any other type of loan. The fact that this happened is only a testament to the gorilla like strength of the student loan lobbying industry on Capitol Hill.

Under the new, democratic congress, it was assumed that this horrible legislation would be undone quickly.

Indeed, the amendment passed by voice vote initially, but the republicans demanded a recorded vote, and there was a delay. Hours later, when the recorded vote was taken is when the shock came.

29 of 37 of the "Blue Dog Democrats" had voted against this amendment! This was enough to tip the scales (The republicans nearly all voted against it), and the amendment went down in defeat.

This was shocking, and disturbing news. The Student Loan industry has bought off the blue dogs, and they more than willingly sold out the students. Now, with no bankruptcy protections the student lenders will slam these borrowers with every penalty and fee they can think of. Without fear of bankruptcy, these lenders (some of whom are charging interest rates as high as 29%) enjoy power that no other type of lender in the United States enjoys. None.

No comments: